David Gal i
Professor of Marketing
at the

University of Illinois at Chicago The University of Illinois Chicago (UIC) is a Public university, public research university in Chicago, Illinois. Its campus is in the Near West Side, Chicago, Near West Side community area, adjacent to the Chicago Loop. The second campus esta ...

. He is best known for his critiques of

behavioral economics Behavioral economics studies the effects of psychological, cognitive, emotional, cultural and social factors on the decisions of individuals or institutions, such as how those decisions vary from those implied by classical economic theory. ...

, and in particular his critique of the behavioral economics concept of

loss aversion Loss aversion is the tendency to prefer avoiding losses to acquiring equivalent gains. The principle is prominent in the domain of economics. What distinguishes loss aversion from risk aversion is that the utility of a monetary payoff depends o ...

. His forthcoming book is titled ''The Power of the Status Quo''.

Academic career

Gal received his Ph.D. from

Stanford University Stanford University, officially Leland Stanford Junior University, is a private research university in Stanford, California. The campus occupies , among the largest in the United States, and enrolls over 17,000 students. Stanford is consider ...

in 2007. He joined the faculty of

The Kellogg School of Management The Kellogg School of Management at Northwestern University (also known as Kellogg) is the business school of Northwestern University, a private research university in Evanston, Illinois. Founded in 1908, Kellogg is one of the oldest and most p ...

at Northwestern University where he remained until 2014, at which time he joined the faculty of The University of Illinois at Chicago. His research has been published in Journal of Consumer Research,

Journal of Marketing Research ''Journal of Marketing Research'' is a bimonthly peer-reviewed academic journal published by the American Marketing Association. It was established in 1964 and covers all aspects of marketing research. According to the ''Journal Citation Reports'', ...

Journal of Marketing The ''Journal of Marketing'' is a bimonthly scholarly journal that publishes peer-reviewed research in marketing. It is published by the American Marketing Association. Established in 1936, It is the fourth-oldest major journal covering marketing ...

, Judgment and Decision Making, Psychological Science, Management Science, and Journal of the American Statistical Association. It has been featured in the ''New York Times'', ''Wall Street Journal'', ''The Toronto Star'', ''Time'', ''Harvard Business Review'', and ''The Globe and Mail','' among other outlets. He has been named among the most productive academic authors in the top marketing journals from 2013 to 2016. He was named a

Marketing Science Institute Founded in 1961, the Marketing Science Institute (MSI) is a corporate-membership-based organization. MSI claims to be unique as the only research-based organization with a network of marketing academics from business schools all over the world as w ...

Young Scholar in 2013 and a Marketing Science Institute Scholar in 2018.

Critique of Loss Aversion and Behavioral Economics

Loss aversion is the principle that losses loom larger than gains. It was introduced by the economics Nobel Prize winner

Daniel Kahneman Daniel Kahneman (; he, דניאל כהנמן; born March 5, 1934) is an Israeli-American psychologist and economist notable for his work on the psychology of judgment and decision-making, as well as behavioral economics, for which he was award ...

and

Amos Tversky Amos Nathan Tversky ( he, עמוס טברסקי; March 16, 1937 – June 2, 1996) was an Israeli cognitive and mathematical psychologist and a key figure in the discovery of systematic human cognitive bias and handling of risk. Much of his ...

in a 1979 paper that is the most cited in economics and third most cited in psychology. Kahneman has subsequently stated “the concept of loss aversion is certainly the most significant contribution of psychology to behavioral economics.” The phrase "loss aversion" also appeared 24 times in the Nobel Committee's description of Richard Thaler's contributions to science when discussing his 2017 Nobel Prize award. Gal has argued that loss aversion is not supported by the evidence and that most phenomena attributed to loss aversion have alternative explanations that are more consistent with the evidence. In particular, Gal has cited psychological inertia as an explanation for the

endowment effect In psychology and behavioral economics, the endowment effect (also known as divestiture aversion and related to the mere ownership effect in social psychology) is the finding that people are more likely to retain an object they own than acquire th ...

and

status quo bias Status quo bias is an emotional bias; a preference for the maintenance of one's current or previous state of affairs, or a preference to not undertake any action to change this current or previous state. The current baseline (or status quo) is take ...

. In addition to his specific critique of loss aversion, Gal has argued that behavioral economics more broadly has been too concerned with understanding ''how'' behavior deviates from standard economic models rather than with understanding ''why'' people behave the way they do. Understanding why behavior occurs is necessary for the creation of generalizable knowledge, the goal of

science Science is a systematic endeavor that builds and organizes knowledge in the form of testable explanations and predictions about the universe. Science may be as old as the human species, and some of the earliest archeological evidence for ...

. He has referred to behavioral economics as a triumph of marketing.

References

{{DEFAULTSORT:Gal, David University of Illinois faculty Stanford University alumni Year of birth missing (living people) Living people